A leading housing group has come to NationsBank's aid as the Charlotte, N.C., banking giant defends itself in a lending-bias case.
The Acorn Housing Corp. last week asked a federal judge to dismiss part of the suit filed against NationsBank by the Washington Lawyers Committee for Civil Rights and Urban Affairs.
The disputed sections refer to Acorn's credit counseling program, which several of the plaintiffs successfully completed before applying for loans at NationsBank.
The lawyer's committee, a prominent civil rights group, sued NationsBank in November for intentionally discriminating against 13 black applicants. The committee has asked the court for class-action status, which would make this the largest fair-lending case to be litigated.
Acorn said the lawyers committee "inaccurately and prejudicially" accused the group of prescreening and prequalifying applicants, a clear violation of the Fair Housing Act.
Acorn said it only provided counseling services, leaving borrowers free to apply to any lender. It also denied promising applicants that they'd get loans.
Allowing these charges to stand could force other nonprofit groups to abandon the credit counseling business for fear of being sued, Acorn said.
The court filing marks the first time a housing group has openly sided with NationsBank in the case, though numerous other groups have privately said the lawyers committee should have targeted a bank that is less supportive of community reinvestment.
NationsBank's lawyer welcomed the assistance. "The Acorn motion provides independent support for NationsBank's position that the factual allegations underlying the complaint are without merit," said Andrew Sandler, a partner at Skadden, Arps, Slate, Meagher & Flom, a Washington law firm.
Richard Ritter, a former federal prosecutor now working with the lawyers committee, said he doesn't understand Acorn's worries. "We didn't allege that they engaged in any illegal activities," Mr. Ritter said.
